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As your Chicagoland real estate agent Michael LaFido, I want to be your resource for all things real estate. Whether you are buying, selling, or investing in real estate, I am here to guide you through the process. Subscribe to this blog to learn all of the latest news from our local market and receive expert tips for buying or selling a home.

The Difference Between a Short Sale and Foreclosure

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Wishing you all a safe and wonderful 4th of July weekend!!!

Today we're going to walk you through the differences between short sales and foreclosures. There are many misconceptions out there about what they are and how they work - luckily, we're here to set the record straight. Here's what you need to know:
  • A short sale is a pre-foreclosure. This happens when the homeowner has stopped making payments and is behind 3 months or more. The homeowner remains in control of the house during this period. If you make an offer, you deal directly with the person selling the home, not their agent or the bank. Although short sales are down from a few years ago, we are still seeing them. They are a better option than foreclosure or filing for bankruptcy if you're having difficulties making payments.
  • Foreclosure, bank owned, or REO (Real Estate Owned) all mean the same thing: the bank has taken back the house and changed out the locks. During this time, banks will often sink money into the property - they'll have the walls painted, repairs made, etc. - in order to increase its value. When a home is bank owned, there is little room to negotiate a price, which means they usually sell for a little above listing price. On the upside, if you are a buyer you can close on a foreclosed home in 30 days and not have to worry about titles.
As you can see, short sales are beneficial to sellers who can no longer make payments because they can avoid foreclosure and bankruptcy. Foreclosures, on the other hand, provide buyers the opportunity to close on a home quickly. Hopefully the difference between the two is clearer now and is helpful to you going forward. If you have any further questions or are looking to buy or sell real estate in the Hinsdale area, give us a call or send us an email for the expertise you deserve.


  1. We had so many requirements and with your patience, kindness and experience we found the best home for us. You are highly recommended to anyone we know that is looking to either buy a home or sell there home.
    Tinley Park real estate agents

  2. Thank you very much for the sharing! COOL.. First Home Buyers